My most challenging financial goal for 2018 was to develop another source of income in addition to my salary and other side hustle income sources. Getting any income can be difficult, let alone an entirely new stream. So I decided to tackle it head on in January.
Why another source of income?
The idea of having a secondary source of income stemmed back in 2014 when I read a book called “The Economy of You” by an American author Kimberly Palmer. She was a financial columnist who was constantly worried about her job security and decided to start a side gig of selling personal planners on Etsy (you should check it out, really useful planners for life events). Since then she has generated over $10,000 additional income and last I checked, she has made over 650 sales.
Kimberly then started paying attention to other micro-entrepreneurs around her who ranged from part-time community bakers to weekend web designers. The common denominator they shared was that they all leveraged their expertise and experience outside of their “main gigs” (i.e. the 9-to-5 job) and earned additional income through their “side gigs” (the 5-to-9 as they are colloquially known). Some performed so well that they earned more from the side than their main job and decided to quit their main gig.
I was immediately hooked.
The idea of deriving all of your income from a single employer always felt crazily dangerous to me. At my first job, one of the key metrics my boss tracked back then was whether a single client contributed more than 1% to the company’s revenue at any given point. If that happened then people were asked to increase sales from other clients. The rationale was simple: no companies should be over-dependent on the business of a single client.
Yet being an employee means depending 100% of my revenue (i.e. salary / income) on a single client (your employer). I’m effectively putting all my eggs in one basket. Isn’t that crazy?
So that’s why I started investing in rental properties and dividend stocks as well as doing side hustles like freelance consulting from time to time. Now I wanted to establish another source.
Which income source should I pursue?
The principle behind finding another source of income is actually really simple: you have something (i.e. knowledge, labour, physical item) that others want / need (i.e. value) and are willing to pay for it.
So I made a list of things that I’m good at and ways to monetise them:
I am quite handy and can learn household tasks fairly quickly -> could be a handyman and help the neighbourhood.
I have years of experience and knowledge in operational and financial improvement for businesses, large and small, plus I’m bloody good at it -> I could be a consultant to businesses that want to grow and take up freelance consulting again.
I have a spare bedroom in my house -> could rent it out on Airbnb
I then asked myself: what requirements do I need to sustain this income effectively?
Must be location-independent, something I can do it comfortably in my living room -> rules out being a handyman.
Must be time-insensitive and can fit around my main job and work -> again rules out the handyman route
Must be physically undemanding: I don’t need more physical activity in my already very active lifestyle (I cycle 12 miles everyday at least) -> rules out the handyman route definitely.
Must be mentally challenging -> rules out the handyman and Airbnb route.
Must be able to generate income quickly rather than waiting for years
Would be nice if it’s easily scalable
Thus #2 (freelance consulting) was the clear winner as it ticks almost all the requirements. So off I went.
Upwork is a global freelancing platform that connects businesses with talent requirements with the appropriate freelancers to enable them to collaborate and transact. It’s a bit like Uber but instead of letting passengers meeting drivers (and vice versa), it allows white-collar professionals and businesses to meet and exchange.
I’ve been using Upwork and its predecessor (Odesk) for about 4 year, but as a business hiring professionals rather than the other way round. I’ve always found the talent pool diverse and effective so Upwork was my first point of call. However I did do some research on its competitors (Freelancers.com, Fiverr, Guru.com), but found that Upwork suits my needs better.
The key reason was because Upwork had way more consulting-based jobs (e.g. financial planning, financial modelling, business plan writing) than its competitors, which were projects that suit my niche. In fact I found a good comparison between the 3 sites which outlined the pros and cons of each.
Getting set up on Upwork
The problem facing new freelancers on Upwork is that most companies / individuals would only hire freelancers with prior experience and feedback on the site (Upwork has a very sophisticated feedback and certification mechanism to identify top talents, as well as basing its search algorithm on these feedback). Newbies by definition wouldn’t have such experience, resulting in a Catch-20 situation where in order to get hired you needed to have experience however in order to have experience, you needed to get hired first.
However don’t despair. If you put in the effort to set up your profile and hunt for projects like a lion then you will land your first gig in no time. I browsed around and thankfully found a very useful article to optimise my profile.
So here I was, ready to roll.
Want to find out about how I landed my 1st project and how the first month went? Part 2 is coming soon…
Until then, adios amigos and remember to comment away!